The Taxation of Pension Schemes (Transitional Provisions) Order 2006

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Lump sums — serious ill-health

39

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Lump sum death benefits— death of member

40

• (1) This paragraph applies to a lump sum paid—

• (a) in respect of the death, occurring before the 6th April 2006, of a member of a pension scheme;

• (b) within two years of the date upon which the administrator of the pension scheme could reasonably have known of the member’s death;

• (c) by a scheme which is treated as becoming a registered pension scheme on the 6th April 2006 by virtue of paragraph 1(1) of Schedule 36;

• (d) in accordance with the rules of that scheme as they stood—

• (i) immediately before the death; or

• (ii) immediately before the 6th April 2006; and

• (e) in circumstances which would not have led to the Commissioners withdrawing the approval of the scheme.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) A lump sum to which paragraph (1) applies shall be chargeable to income tax in accordance with section 648B of ICTA[^f00034] as if—

• (a) that section had not been repealed;

• (b) references in that section to the administrator of the scheme were references to the scheme administrator of the registered pension scheme which is treated as coming into being by virtue of paragraph 1(1)(g) of Schedule 36;

• (c) subsection (3) were omitted; and

• (d) the reference in subsection (4) to the rules of the scheme were a reference to the rules of the personal pension scheme as they stood immediately before the 6th April 2006.

• (4) For the purposes of a lump sum payment to which paragraph (1) applies, regulation 5 of the Personal Pension Schemes (Information Powers) Regulations 2000[^f00035] (“the 2000 Regulations”) shall continue to have effect, subject to the following modifications—

• (a) references to the scheme administrator of the personal pension scheme are to be read as references to the scheme administrator of the registered pension scheme which is treated as coming into being by virtue of paragraph 1(1)(g) of Schedule 36; and

• (b) in paragraph (2) of that regulation for “an approved personal pension scheme” substitute “the registered pension scheme”.

• (5) In section 98(5) of the Taxes Management Act 1970 the entry in Table 1 relating to regulations under section 651A(1)(b) to (d) of ICTA shall continue to have effect, so far as it relates to regulation 5 of the 2000 Regulations as saved, with modifications, by paragraph (4).

• (6) In this article and article 41—

• “the Commissioners” means the Commissioners for His Majesty’s Revenue and Customs and, in relation to times before 18th April 2005, includes the Commissioners of Inland Revenue;

• “existing scheme” means a scheme which becomes a registered pension scheme by virtue of paragraph 1(1) of Schedule 36 (pension schemes etc.: transitional provisions and savings — deemed registration of existing schemes);

• “member” means a member of an existing scheme.

Lump sum death benefits — death of a dependant

41

• (1) This paragraph applies to a lump sum paid—

• (a) in respect of the death, occurring before the 6th April 2006, of a dependant of a former member of a pension scheme;

• (b) by a scheme which is treated as becoming a registered pension scheme on the 6th April 2006 by virtue of paragraph 1(1)(g) of Schedule 36 (personal pension schemes);

• (c) within two years of the date upon which the administrator of the pension scheme could reasonably have known of the dependant’s death;

• (d) in accordance with the rules of that scheme as they stood—

• (i) immediately before the dependant’s death; or

• (ii) immediately before the 6th April 2006; and

• (e) in circumstances which would not have led to the Commissioners withdrawing the approval of the scheme.

• (2) Paragraphs (3) to (5) of article 40 apply for the purposes of paragraph (1) as they apply for the purposes of paragraph (1) of that article.

Protected pension age and multiple pensions

42

• (1) In the case of a member who has a protected pension age in connection with at least two of the three types of pension listed in paragraph (2) from the same registered pension scheme, Schedule 36 is modified in accordance with paragraph (3).

• (2) The three types of pension are—

• (a) a scheme pension under a defined benefits arrangement;

• (b) a scheme pension under a money purchase arrangement;

• (c) a lifetime annuity.

• (3) In paragraphs 22(7)(a) and 23(7) for “on the same date” substitute “within a period of six months beginning with the earliest date on which the individual becomes entitled to any of the benefits.”.

Protected pension age and multiple pensions - member dies before receiving all pensions

43

• (1) Schedule 36 is modified in accordance with paragraphs (3) and (4) where—

• (a) a member has a protected pension age in connection with at least two of the three types of pension listed in regulation 42(2) from the same registered pension scheme;

• (b) the member dies before the end of the specified period after becoming entitled to at least one but not all of the benefits in respect of the pensions; and

• (c) the scheme administrator considers that, had the individual not died, the individual would have become entitled to all of the benefits in respect of the pensions within the specified period.

• (2) The “specified period” is the period of six months beginning with the earliest date on which the individual became entitled to any of the benefits in respect of the pensions.

• (3) For paragraph 22(7)(a) substitute—

(a) the scheme administrator considers that, had the individual not died, the member would have become entitled to all the benefits payable to the member under arrangements under the pension scheme (to which the member did not have an actual entitlement on or before 5th April 2006) within a period of six months beginning with the earliest date on which the individual became entitled to any of the benefits, and

• (4) For paragraph 23(7) substitute—

(7) The retirement condition is met in relation to the member and the pension scheme if the scheme administrator considers that, had the individual not died, the member would have become entitled to all the benefits payable to the member under arrangements under the pension scheme (to which the member did not have an actual entitlement on or before 5th April 2006) within a period of six months beginning with the earliest date on which the individual became entitled to any of the benefits.

Normal minimum pension age – modification of section 165 (payment of pension rules)

44

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Normal minimum pension age – modification of paragraph 1 of Schedule 29 (lump sum rule)

45

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Signed

Vernon Coaker — Tom Watson — Two of the Lords Commissioners of Her Majesty’s Treasury — 9th March 2006

Editorial notes

[^key-de4c095f647d58248f89dd4606882131]: Art. 1 in force at 6.4.2006, see art. 1(1)

[^key-b66e9f3519abfebae6b4f7c34ee1d273]: Art. 2 in force at 6.4.2006, see art. 1(1)

[^key-53b8d85325147b20c4b4ab92400eb434]: Art. 3 in force at 6.4.2006, see art. 1(1)

[^key-5d39bcddcfbcfcaace4ab14d7c9744e3]: Art. 4 in force at 6.4.2006, see art. 1(1)

[^key-e46b59f595577e347701c86717b41818]: Art. 5 in force at 6.4.2006, see art. 1(1)

[^key-e82c7e3f3e3f1def2af0c7b537d0fd62]: Art. 6 in force at 6.4.2006, see art. 1(1)

[^key-356c43ba792f0f93898b8ee8d787b2b0]: Art. 8 in force at 6.4.2006, see art. 1(1)

[^key-1feacaa508b35038cb4e51769d69ec80]: Art. 9 in force at 6.4.2006, see art. 1(1)

[^key-63a5db614044cf4f77e2c516dc45c6c4]: Art. 10 in force at 6.4.2006, see art. 1(1)

[^key-e477386a176e3c0c49f7e51e65fcacb6]: Art. 11 in force at 6.4.2006, see art. 1(1)

[^key-a8f90bd1ae4814ae2a3b0b7535ef5125]: Art. 12 in force at 6.4.2006, see art. 1(1)

[^key-90e3d817be8c8bf1f8b145a138e4bd8c]: Art. 15 in force at 6.4.2006, see art. 1(1)

[^key-c0b43ccc0abe188b61683e634cd3118e]: Art. 16 in force at 6.4.2006, see art. 1(1)

[^key-d560dbb9d025ff66bcc535d4ab66a530]: Art. 17 in force at 6.4.2006, see art. 1(1)

[^key-6ad71eeb585216a8a46a64e444ee6277]: Art. 18 in force at 6.4.2006, see art. 1(1)

[^key-444e4c34480a08e7adb29bbdfd03b588]: Art. 20 in force at 6.4.2006, see art. 1(1)

[^key-187e7430f740b96625b6803a2ab5c849]: Art. 21 in force at 6.4.2006, see art. 1(1)

[^key-c0dbe69dee5b5c612112421c4d017f61]: Art. 24 in force at 6.4.2006, see art. 1(1)

[^key-51854bcc96a7c5eda7a915e6d666eb6f]: Art. 27 in force at 6.4.2006, see art. 1(1)

[^key-659494df3adc51240cb2eaa20f6ed8f4]: Art. 28 in force at 6.4.2006, see art. 1(1)

[^key-f8329d158e2eba6231978670347d597b]: Art. 29 in force at 6.4.2006, see art. 1(1)

[^key-59064ca38c9f35a4e8668f37b6979d58]: Art. 30 in force at 6.4.2006, see art. 1(1)

[^key-a0a577eb6f945abe8de83103dbeb5baf]: Art. 31 in force at 6.4.2006, see art. 1(1)

[^key-ff10d41cde792d201a00f0e73d9a5b1f]: Art. 32 in force at 6.4.2006, see art. 1(1)

[^key-01e1600c5cd139c8ccedd577ee90b7e8]: Art. 33 in force at 6.4.2006, see art. 1(1)

[^key-b33fddf263eb69f3841c7693fb8ff391]: Art. 35 in force at 6.4.2006, see art. 1(1)

[^key-ab9dd55643ad0d5dea9b7b3d09eba6ad]: Art. 36 in force at 6.4.2006, see art. 1(1)

[^key-40241f991beca990abdf9823cb52932a]: Art. 37 in force at 6.4.2006, see art. 1(1)

[^key-6cb3e7ca4e1fe97b92602d56cd912b3d]: Art. 40 in force at 6.4.2006, see art. 1(1)

[^key-b59dd9242b307e376868901bcdf137f6]: Art. 41 in force at 6.4.2006, see art. 1(1)

[^key-1e5e0a875d6dbe7e5bfed18b413dfe91]: Arts. 25-25D substituted for art. 25 (25.7.2006) by The Taxation of Pension Schemes (Transitional Provisions) (Amendment No. 2) Order 2006 (S.I. 2006/2004), arts. 1(1), 3

[^key-3d1efb266c342be1d06b2c7b8f9f99c9]: Art. 26 omitted (25.7.2006) by virtue of The Taxation of Pension Schemes (Transitional Provisions) (Amendment No. 2) Order 2006 (S.I. 2006/2004), arts. 1(1), 4

[^key-9b4ef771fa411c1d50bd22041ee7bc26]: Art. 29A inserted (with effect in accordance with art. 1 of the amending S.I.) by The Taxation of Pension Schemes (Transitional Provisions) (Amendment) Order 2006 (S.I. 2006/1962), arts. 1, 3

[^key-153910ec0a2bff734ae32eafe76c0989]: Words in art. 40(1)(b) substituted (with effect in accordance with art. 1 of the amending S.I.) by The Taxation of Pension Schemes (Transitional Provisions) (Amendment) Order 2006 (S.I. 2006/1962), arts. 1, 4(a)

[^key-3d2dcde965187ce9b24b00dcb53b2131]: Words in art. 40(1)(e) substituted (with effect in accordance with art. 1 of the amending S.I.) by The Taxation of Pension Schemes (Transitional Provisions) (Amendment) Order 2006 (S.I. 2006/1962), arts. 1, 4(b)

[^key-d742e2dbc77c9a34a82b942ae3360c6d]: Words in art. 41(1)(c) substituted (with effect in accordance with art. 1 of the amending S.I.) by The Taxation of Pension Schemes (Transitional Provisions) (Amendment) Order 2006 (S.I. 2006/1962), arts. 1, 5(a)

[^key-7ef422af6d100df61b68b68dcbbe1de6]: Words in art. 41(1)(e) substituted (with effect in accordance with art. 1 of the amending S.I.) by The Taxation of Pension Schemes (Transitional Provisions) (Amendment) Order 2006 (S.I. 2006/1962), arts. 1, 5(b)

[^key-06eddd4bc99a5ec60b4693f119c06a4d]: Art. 5A inserted (with effect in accordance with art. 1(3) of the amending S.I.) by The Taxation of Pension Schemes (Transitional Provisions) (Amendment) Order 2008 (S.I. 2008/2990), arts. 1(1), 3

[^key-8ff5867ab3739b42f42af487cfff1060]: Arts. 23A-23D inserted (1.6.2009) by The Taxation of Pension Schemes (Transitional Provisions) (Amendment) Order 2009 (S.I. 2009/1172), arts. 1, 3

[^key-311851e9779543459558a8d4dabf5d61]: Arts. 34-34B substituted for art. 34 (with effect in accordance with art. 1 of the amending S.I.) by The Taxation of Pension Schemes (Transitional Provisions) (Amendment No. 2) Order 2009 (S.I. 2009/1989), arts. 1, 2(2)

[^key-b97d13a2975c607e8da75586618b388c]: Art. 25D modified (1.5.2010) by The Financial Assistance Scheme (Tax) Regulations 2010 (S.I. 2010/1187), regs. 1(1), 19(b)

[^key-62b89f77b09672b5a432d2ec2188f0f9]: Arts. 23ZA-23ZE inserted (6.4.2011 with effect in relation to any time on or after 6.4.2006) by The Taxation of Pension Schemes (Transitional Provisions) (Amendment) Order 2011 (S.I. 2011/732), arts. 1(1)(2), 3

[^key-06cefaa2b3c7f0561c045cc5ebc2a602]: Arts. 42, 43 inserted (6.4.2011 with effect in relation to any time on or after 6.4.2011) by The Taxation of Pension Schemes (Transitional Provisions) (Amendment) Order 2011 (S.I. 2011/732), arts. 1(1)(3), 4

[^key-6ae0e90032c31feb9b9796f8c0fc4d68]: Words in art. 23C(4) omitted (11.8.2011 with effect in relation to lump sums paid on or after 6.4.2011) by virtue of The Taxation of Pension Schemes (Transitional Provisions) (Amendment) (No.2) Order 2011 (S.I. 2011/1782), arts. 1(1)(3), 2(3)

[^key-df78e7cfa3953b0d8774ace132bbe68f]: Word in art. 25(3)(a) substituted (11.8.2011 with effect in relation to lump sums paid on or after 6.4.2011) by The Taxation of Pension Schemes (Transitional Provisions) (Amendment) (No.2) Order 2011 (S.I. 2011/1782), arts. 1(1)(3), 2(4)

[^key-a305a9cd134ddac7402caf422d405b01]: Art. 25A(5) omitted (11.8.2011 with effect in relation to lump sums paid on or after 6.4.2011) by virtue of The Taxation of Pension Schemes (Transitional Provisions) (Amendment) (No.2) Order 2011 (S.I. 2011/1782), arts. 1(1)(3), 2(5)

[^key-68be61f7d1a1f61c9e01ae9b226b0fbf]: Art. 33(3) applied (with modifications) (coming into force in accordance with reg. 1(1) (see S.I. 2012/687, S.I. 2012/688 and S.I. 2012/966)) by The Postal Services Act 2011 (Taxation) Regulations 2012 (S.I. 2012/764), regs. 1(1), 15(3)(4)

[^key-61d3154dea7fb7e2c46c36e6004e04cc]: Art. 24 applied (coming into force in accordance with reg. 1(1) (see S.I. 2012/687, S.I. 2012/688 and S.I. 2012/966)) by The Postal Services Act 2011 (Taxation) Regulations 2012 (S.I. 2012/764), regs. 1(1), 14(2)

[^key-0767e85c0304b053f31c576f07907266]: Words in art. 18 inserted (19.3.2014) by Finance Act 2014 (c. 26), Sch. 5 paras. 12(4)(5), 15

[^key-75bd730125aa849c2f222bd588f1713b]: Word in art. 23C(4) substituted (with effect in accordance with s. 42(9) of the amending Act) by Finance Act 2014 (c. 26), s. 42(5)(9)

[^key-260632d09fba6ffbd838248ff0dc7277]: Words in art. 23C substituted (with effect in accordance with Sch. 1 para. 72(2) of the amending Act) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 72(1)(2)

[^key-8409a4dc9ad090468303ab60e4d4585c]: Art. 25C(4) inserted (17.12.2014) by Taxation of Pensions Act 2014 (c. 30), Sch. 1 para. 69(1) (with Sch. 1 para. 69(2))

[^key-074536f071abddbb7fbf585a13dd09bd]: Arts. 25CA-25CC inserted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 9 paras. 95(5), 124 (with Sch. 9 paras. 125-132A) (as amended by S.I. 2024/356, regs. 1, 4)

[^key-c7ba54a0e6d533b65baf01d4c6acbb1d]: Words in art. 25A(3) substituted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 9 paras. 95(2), 124 (with Sch. 9 paras. 125-132A) (as amended by S.I. 2024/356, regs. 1, 4)

[^key-70ed3a84f6a81d1067c6194a8bba0e2d]: Words in art. 25B(2) substituted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 9 paras. 95(3), 124 (with Sch. 9 paras. 125-132A) (as amended by S.I. 2024/356, regs. 1, 4)

[^key-cd554d6d414c542784f1dc093a05ae09]: Art. 25C(1A) substituted for arts. 25C(2)(3A) (6.4.2024 for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 9 paras. 95(4), 124 (with Sch. 9 paras. 125-132A) (as amended by S.I. 2024/356, regs. 1, 4)

[^key-622cdd3b6c91ad33c9bcc53cf3d3b527]: Words in art. 25CA(1) substituted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), regs. 1(3), 11(2)(a)

[^key-7c42c84ac772ed7a5767bf9fc65d52b3]: Words in art. 25CA(1) inserted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), regs. 1(3), 11(2)(b)

[^key-a06d0ad6cc0098582e5e2e3e50ae86f2]: Words in art. 25CB(1) substituted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), regs. 1(3), 11(3)(a)

[^key-97caadc63ce52f00ee999f3730bd8694]: Words in art. 25CB(1) inserted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), regs. 1(3), 11(3)(b)

[^key-fcc3151ef4e72951aa550723358c35bf]: Words in art. 25CC(1) substituted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), regs. 1(3), 11(4)(a)(i)

[^key-4e2e0fb59e9dcf0dfceed576a6d2a5a0]: Words in art. 25CC(1) inserted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), regs. 1(3), 11(4)(a)(ii)

[^key-e74afc18b98003ccff76f353ab8a07e6]: Words in art. 25CC(5) inserted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2024 (S.I. 2024/356), regs. 1(3), 11(4)(b)

[^key-202716db66ae3c3a23a8a41025601792]: Words in art. 1(2) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(2)

[^key-2e5e5a5ea9bf20dd318654a677048fa1]: Art. 7 substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(3)

[^key-3011104505430745ad1955f3cd59c2a9]: Words in art. 10(1) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(4)

[^key-b75277f14004f7f823c791cb2ab72f78]: Words in art. 11(1) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(5)

[^key-e6a9f9e51ecba6acc12e812249d35e2c]: Words in art. 12(2) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(6)(a)(i)

[^key-ae857bdfae0db3728f4b5cbb18f24629]: Words in art. 12(2) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(6)(a)(ii)

[^key-0d723ad0fd47cd8041f80c76047cd32a]: Words in art. 12(3) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(6)(b)(i)

[^key-8c5e3d88fa993274cd5e3daa303aeb86]: Words in art. 12(3) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(6)(b)(ii)

[^key-1cec2fcbcea84000040efaf264b557d9]: Art. 13 substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(7)

[^key-e76cd3d2a5b4d2a5377461d4f0f651c4]: Art. 14 substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(8)

[^key-3011a81689c08d840846faa9a26dc2e1]: Words in art. 18 substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(9)

[^key-219d3e9d39528acc528a87488dc60c3b]: Art. 19 omitted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by virtue of The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(10)

[^key-23aeb254f6fec9224dffc5ef2e431c2e]: Words in art. 20(2) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(11)(a)(i)

[^key-3b3d08fc6fce029ff4e3042fea940ef8]: Word in art. 20(2) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(11)(a)(ii)

[^key-c7e9a3a346f89ad19d812cbcee8a7220]: Words in art. 20(3) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(11)(b)

[^key-ac6178e4b3d3839d48f57a2df196ad3e]: Words in art. 21(1) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 4(2) (with reg. 6)

[^key-b89439a4615cbda0be5fca38cd9c4d14]: Art. 22 omitted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by virtue of The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 4(3) (with reg. 6)

[^key-93a6190d00e393cbeff64804f116e86f]: Words in art. 23C(4) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(14)

[^key-602a9dcaf00215922f54644b8abd36ae]: Words in art. 23D(2) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 4(8) (with reg. 6)

[^key-3e4422773b278bb0421a4b59d9edf288]: Art. 23ZC(2) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(12)

[^key-f3e48f19235102be177c849d8c534224]: Art. 23ZE(2) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(13)

[^key-a2d1979bb8dc7858c33812fd08833d78]: Words in art. 25CA(2) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(16); and said words also substituted by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 4(9)(a) (with reg. 6)

[^key-1077ea2c44bccd70109f5def497dd3ce]: Words in art. 25CA(2) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 4(9)(b) (with reg. 6)

[^key-0471b397e9a79e674c7e8b68747b172c]: Words in Art. 25CC(2) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 4(10)(b) (with reg. 6)

[^key-4b428fa1ae802345292884930aa87ea3]: Word in art. 28(2) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(18)(a)(i)

[^key-7da86114c24c9584c2a1c18f3f5e0e2f]: Words in art. 28(2) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(18)(a)(ii)

[^key-94423ee3732ccb5ae32b5e07c8585ea0]: Words in art. 28(3)(a) omitted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by virtue of The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(18)(b)

[^key-cb462b5ee200fb5989a59f263b760987]: Art. 29(3)(b) omitted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by virtue of The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(19)(a)

[^key-7e252783bd05c581206230df6e36c5c4]: Art. 29(5) omitted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by virtue of The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(19)(b)

[^key-24c4c741e813da8dde9cca1d5428af55]: Art. 29A(3) omitted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by virtue of The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(20)

[^key-2d6f48a2967ceb6089ad599ca2377368]: Words in art. 33(3) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(21)(a)

[^key-9ba81e8426d184ac1ef1ec70887e2ce7]: Art. 33(4)(5) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(21)(b)

[^key-bcee0ab74b74834239982b9cd2c5cd95]: Words in art. 37 heading substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(22)(a)

[^key-1a2e11cd8890868b3f76549f48cd0a38]: Words in art. 37(1) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(22)(b)

[^key-9e01c618d5495cdfbb74cae43e4089af]: Art. 37(2) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(22)(c)

[^key-83ce0105d64a0909aace0ad867c1bb48]: Art. 37(4) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(22)(d)

[^key-f95b34dae7e83ba4b7b73397e1e5ca49]: Art. 38 omitted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by virtue of The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(23)

[^key-39d47ba3a632f4b41c8cb59d0e2f81b7]: Art. 39 omitted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by virtue of The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(23)

[^key-fa6b2b4505261c75d4081996d5166a36]: Art. 40(2) omitted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by virtue of The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(24)(a)

[^key-8daa747416a8d1a77b488b70e6a6543e]: Art. 40(6) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(24)(b)

[^key-532b4db9f28446aa4ad37d1e51628ba2]: Art. 44 omitted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by virtue of The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(25)

[^key-b685df99db43a1563da8ac0e5f512811]: Art. 45 omitted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by virtue of The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(25)

[^key-633cb1bf4620afea3442d4622376834f]: Art. 23 substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 4(4) (with reg. 6)

[^key-f64c4ad1186f89b06148aa3a1a26c6a4]: Words in art. 23ZA(2) renumbered (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 4(5)(a)(i) (with reg. 6)

[^key-a29786ba60d4bf19729db5af239fb353]: Words in art. 23ZA(2) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 4(5)(a)(ii) (with reg. 6)

[^key-3f8f4c989734783df6192df7550d77c1]: Art. 23ZA(3) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 4(5)(b) (with reg. 6)

[^key-5eee0070b2edad8447f7530bad104441]: Words in art. 25CC(2) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 2) Regulations 2024 (S.I. 2024/1012), regs. 1(2)(3), 25(17); and said words also substituted by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 4(10)(a) (with reg. 6)

[^key-c7fb116efbe49c59c0585ed035ddb792]: Words in art. 23ZD(2) renumbered (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 4(6)(a)(i) (with reg. 6)

[^key-94486eff56aff7b5429d90f0b387db9e]: Words in art. 23ZD(2) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 4(6)(a)(ii) (with reg. 6)

[^key-e801f6ddc75b95ef344813a39dfcd525]: Art. 23ZD(3) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 4(6)(b) (with reg. 6)

[^key-89441c5751f24494a70b40589a002ebc]: Words in art. 23ZE(3) renumbered (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 4(7)(a)(i) (with reg. 6)

[^key-e8200b323263d79727d7492679ed459c]: Words in art. 23ZE(3) inserted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 4(7)(a)(ii) (with reg. 6)

[^key-774049ffd451557eb1e6dde10f8bce99]: Art. 23ZE(4) substituted (18.11.2024 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) (No. 3) Regulations 2024 (S.I. 2024/1167), regs. 1(2)(3), 4(7)(b) (with reg. 6)

[^key-45436d0e7608c88b734bb4101bf5d091]: Word in art. 23(2) substituted (25.6.2026 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2026 (S.I. 2026/698), regs. 1(2)(6), 14(2)

[^key-f79b18671f8e807dc83784960cf36586]: Art. 23D(3) inserted (25.6.2026 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2026 (S.I. 2026/698), regs. 1(2)(6), 14(3)

[^key-f4dbf7e9f97d62010fa00a8e26876ea2]: Words in art. 25(2) substituted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2026 (S.I. 2026/698), regs. 1(3)(6), 14(4)

[^key-cbd147acf92e0de7c98f2aa60b73c029]: Art. 25CA(5) inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2026 (S.I. 2026/698), regs. 1(3)(6), 14(5)

[^key-8f5b599562bfec35749a12d8edadca8e]: Art. 25CB(5) inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2026 (S.I. 2026/698), regs. 1(3)(6), 14(6)

[^key-ed8698c812f73749b667c54a45d8e2ba]: Art. 25CC(6) inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2026 (S.I. 2026/698), regs. 1(3)(6), 14(7)

[^key-ab199379ffb25f9e2f8a612c2eb2f94a]: Words in art. 25D(2) omitted (25.6.2026 for the tax year 2024-25 and subsequent tax years) by virtue of The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2026 (S.I. 2026/698), regs. 1(2)(6), 14(8)(a)

[^key-5fa697439760b1e755b01634d6015712]: Art. 25D(3) substituted (25.6.2026 for the tax year 2024-25 and subsequent tax years) by The Pensions (Abolition of Lifetime Allowance Charge etc) Regulations 2026 (S.I. 2026/698), regs. 1(2)(6), 14(8)(b)

Explanatory note

(This note is not part of the Regulations)

This Order contains further transitional provisions in relation to the new provisions for pension schemes coming into force on 6th April 2006 (“A Day”) pursuant to Part 4 of the Finance Act 2004 (“the 2004 Act”).

Article 2 provides for the modification of section 161 (meaning of payment). The ambit of section 161(3) is extended to cover payments made or benefits provided, from investments purchased by approved schemes before A day. Paragraph 3 of Article 2 excludes certain annuities bought from insurance companies from this extension. Paragraphs 4 and 5 deal with approved schemes which were wound up prior to A day. The wording of section 161(4) is modified in respect of these schemes so that the payment is deemed to be made by a registered scheme.

Articles 3 to 5 provide for commencement provisions for unsecured pensions. Pensions which are in payment by way of income withdrawal before A day and which become unsecured pensions or dependant’s unsecured pension at A day would need to be valued on A day under the existing legislation. These transitional provisions are designed to stagger the date of the valuation exercise to avoid a bottleneck of valuations. Article 3 sets out the pensions which will be covered by these transitional provisions. Article 4 provides for the modification of section 165(1), Pension rule 5. The 120% maximum is reduced to 100% (the pre A day limit) for schemes which have not been re-valued using the new rules. Article 5 makes various modifications to paragraphs 9 and 24 of schedule 28 to enable pensions referred to in article 3 to be re-valued at any time up to 6th April 2006 (or earlier, if there has been an annuity purchase prior to that date). The modifications provide that the pre A Day valuation will be used as the “basis amount” until the new valuation takes place.

Articles 6 to 8 provide transitional protection for people who have pre A Day rights to life cover lump sums where the rules of the pension scheme included such provision on 10th December 2003. Under the new regime lump sum payments made on or after the member’s 75th birthday will be unauthorised. Article 6 sets out the conditions which the member of the registered pension scheme needs to satisfy to qualify for the transitional protection. Article 7 provides for modifications to section 636A of the Income Taxes (Earnings and Pensions) Act 2003 to add life cover lump sums to the list of lump sums exempt from income tax. Article 8 modifies section 168(1) to insert life cover lump sums to the list of lump sum death benefits that a pension scheme is authorised by make under section 164. Paragraph (3) of article 8 adds a new paragraph 21A to Schedule 29 defining “life cover lump sum”.

Articles 9 to 11 provide transitional protection for individuals who qualify for “primary protection” under paragraph 7 to Schedule 36 but whose pre-commencement rights may have been undervalued on 5th April 2006 due to the poor performance of investments held by the scheme. If the scheme receives compensation in respect of the poor performance on or after A day this compensation becomes potentially chargeable to the lifetime allowance charge (section 214). Article 9 sets out the conditions which the individual needs to satisfy to qualify for the transitional protection. Article 10 modifies section 212 (valuation of uncrystallised rights for the purposes of section 210) for the purposes of calculating RRin paragraph 7(3) of Schedule 36. Paragraph (2) deducts the market value of any “relevant compensation” from the amount of RR and paragraph (3) defines “relevant compensation”. Paragraph (4) and (5) apply the modifications to hybrid arrangements (section 212(7). Article 11 modifies paragraph 8(5) of Schedule 36 (valuation of the individual’s uncrystallised right) to ensure that the modifications made by article 10 apply.

Articles 12 to 14 deal with individuals who qualify for primary protection and a lifetime allowance enhancement factor under section 221 in relation to a period of non-residence. The modifications prevent the individual qualifying for two lifetime allowance enhancement factors in respect of the same increase in benefits. Article 12 contains details of the individuals who will be affected by the modifications. Article 13 contains modifications to the value of OV in section 222(4) and (5)(b) to prevent it being indexed prior to A day. Article 14 contains modifications to section 223 (arrangements that are not money purchase arrangements). The definitions of PB and LSB in sub-section (4) are modified so that the rights referred to are valued at 5th April 2006. Paragraph (3) inserts sub-section (4A) indexing PB and LSB during the active membership period (as defined in section 221(4).

Articles 15,16 and 17 provide transitional protection to contributions make by employers where those contributions qualified for corresponding relief under section 76(6A) and (6C) of the Finance Act 1989. Article 15 sets out the contributions that may be treated as if they were relevant migrant member contributions under paragraph 2 of Schedule 33 and the conditions that must be met in respect of those contributions. Paragraph (4) applies the provisions of the Pension Schemes (Information Requirements – Qualifying Overseas Pension Schemes, Qualifying Recognised Overseas Pension Schemes and Corresponding Relief) Regulation 2005 S.I. 2006/208 to qualifying employees and to exempt employees under article 17. Paragraphs (5) and (6) apply the transitional protection to pension schemes which have received a block transfer from a scheme to which paragraph (2) applies. Article 16 modifies section 245 (restriction of deduction for contributions by employer) for cases which qualify for transitional protection under article 15. Section 245 modifies amends Schedule 24 of the Finance Act 2003 (“the 2003 Act”) and the new modification prevents contributions which have been given relief under article 15 being given double relief under Schedule 24 of the 2003 Act. Article 17 provides that the provisions of section 308A of ITEPA 2003 (exemption of contributions to overseas pension scheme) shall apply to employees (“exempt employees”) who meet the conditions set out in paragraphs (1) and (2) of the article.

Article 18 switches off paragraph 1(1)(b) of Schedule 29 (requirement that lump sum payable only when lifetime allowance available) in the case of an individual whose pension commencement lump sum is determined by paragraphs 27 and 29 of Schedule 36 (enhanced protection).

Article 19 modifies paragraph 2(6) of Schedule 29 (calculation of the available portion of the member’s lump sum allowance) in the case of individuals who fall within paragraph 20(1) of Schedule 36 (individuals who have an actual right to payment of one or more pensions on 5th April 2006). Paragraph 2(6) is modified so that AAC includes any pre-commencement pension rights valued under paragraph 20 of Schedule 36.

Article 20 provides that where a lump sum death benefit is paid in respect of a member who had an actual right to payment of a relevant pension (a pre-commencement pension) immediately before his death, those pre-commencement pension rights will be taken into account when calculating the available amount of lifetime allowance to be set against the lump sum death benefit.

Articles 21 to 23 provide for scheme specific lump sum protection as set out in paragraphs 31 to 34 of Schedule 36 (entitlement to lump sums exceeding 25% of uncrystallised rights) to be lost in respect of rights transferred where there been a partial transfer of those rights (rather than a block transfer) away from a scheme. Article 21 sets out when the modifications in articles 22 and 23 shall apply. Article 22 modifies paragraph 31 of Schedule 36. A new paragraph (2A) is added which provides for the modifications to Schedule 29 made by paragraph 34 (as modified by article 23) to apply to persons where sums and assets representing accrued rights are transferred other than by a block transfer to another scheme. Article 23 modifies paragraph 34 of Schedule 36 so that the amount that has been partially transferred shall be ignored when calculating the “permitted maximum” in paragraph 2 of Schedule 29.

Article 24 disapplies the limit on dependants scheme pensions set out in paragraphs 16A,B and C of Schedule 28 where the member in respect of whom the dependant’s scheme pension is being paid was actually entitled to one or more relevant existing pensions (as defined in paragraph 10(2) of Schedule 36) on 5th April 2006.

Article 25 and 26 provides transitional protection for individuals whose benefits will only be payable as a lump sum with no connected pension. Paragraph (2) of article 25 sets out the conditions that the individual must meet to qualify for the protection. Paragraph (3) adds a “stand-alone lump sum to the list of lump sums which are authorised payments in section 166(1). Paragraph (4) inserts a new paragraph 3A into Schedule 29 which provides a definition of a “stand-alone lump sum”. Article 26 modifies paragraph 31(3) of Schedule 36 for individuals who meet the conditions set out in paragraph (2) of the article. Paragraph (3) applies the provisions of paragraph 31 of Schedule 36 (entitlement to lump sums exceeding 25% of uncrystallised rights) so that individuals whose benefits are payable as a lump sum only can qualify for the modification of the “permitted maximum” lump sum rules in Schedule 29.

Article 27 deals with contracts which prior to A day, had been approved under section 621(1)(b) of ICTA. Paragraph (3) adds these contracts to the list of pensions in paragraph 1(1) of Schedule 36 which are converted to registered pensions and paragraph (4) adds the contracts to the list of “pre-commencement retirement annuity arrangements” in paragraph 40(3) of Schedule 36.

Article 28 provides that individuals who have become entitled to a tax-free lump sum before A day but deferred their entitlement to the accompanying pension will not become entitled to a second tax-free lump sum under the same arrangement. Paragraph (2) sets out the conditions and paragraph (3)(a) provides that paragraph 1 of Schedule 29 shall be modified so that the tax free lump sum shall be treated as a pension commencement lump sum with a deemed crystallisation on A day. No lifetime allowance charge will arise in respect of the sum however. Paragraph (3)(b) inserts a new paragraph (3A) into paragraph 1 of Schedule 29 which provides that the accompanying pension shall not be a “relevant pension” pursuant to sub-paragraph (3). Any further lump sums paid out in connection with the pension will therefore not be pension commencement lump sums.

Articles 29 modifies paragraphs 8 and 9 of Schedule 28 so that certain types of pension to which the member was entitled immediately before A day shall become unsecured pension funds and accordingly covered by the new regime. Paragraphs (1) and (2) set out the applicable conditions. Paragraph (3) modifies paragraph 8 of Schedule 28 (member’s unsecured pension fund) so that the pensions listed will become unsecured pension funds at A day. Sub-paragraph (d) provides that these rights shall form a separate arrangement and that this deemed designation shall not create a benefit crystallisation event. Paragraph (4) contains amendments to paragraph 9 of Schedule 28 (unsecured pension year and basis amount for unsecured pension year). Paragraph (5) modifies section 216 so that benefit crystallisation events 2, 4 and 8 are not triggered when the unsecured pension funds are utilised to provide a scheme pension, lifetime annuity or rights under a qualifying recognised overseas pensions scheme. This paragraph is necessary because the provisions in paragraphs 3 and 4 of Schedule 32 preventing overlap do not apply appropriately to these funds that were in existence before A day.

Article 30 provides similar provisions to article 29 for dependant’s pension funds. Paragraphs (1) and (2) set out the conditions which the dependant must meet for the modifications to take effect. Paragraph (3) modifies paragraph 22 of Schedule 28 (dependant’s unsecured pension fund) so that the unsecured pensions listed will become dependant’s unsecured pension funds at A day. Paragraph (4) contains amendments to paragraph 23 (unsecured pension year and basis amount for unsecured pension year).